Australia’s advertising sector an important economic driver

The advertising industry delivers A$53 billion in annual value to the Australian economy, says Deloitte Australia, in its first in-depth study of the sector since 2016. 

The report, commissioned by the Advertising Council of Australia (ACA), the Australian Association of National Advertisers (AANA) and the Media Federation of Australia (MFA), said A$18 billion was spent on advertising last year, and the sector employs over 153,000 Australians; the number in direct roles is 85,917, while it indirectly employs 67,465. 

“In recent years, advertising expenditure has increased modestly,” the report says. At the same time, increasing digitisation and maturity of advertising campaigns has brought more competition and lowered the cost of advertising.” 

Why Australia’s advertising sector matters

Through tough economic times it’s important to acknowledge the role that advertising plays as a lever for growth in the economy. 

How advertising contributes to Australian economy 

• Economic growth: The A$53 billion advertising sector equated to 2.1% of Australia’s total GDP in 2022.The economic impact of advertising is larger than the accommodation and food services industry in 2022 ($47 billion) and telecommunications industry in 2018 ($52 billion).
• Job creation: Direct advertising employment has increased by almost 30,000 since previous research in 2016, a growth of 5% per year, compared to an average 2% per year across all industries. 
• Supply chain impact: The industry has grown two times faster than the labor market since 2015. This means that for every five people directly employed in advertising, a further four are employed in industries and sectors that provide inputs to advertising through the supply chain.
• Cost of living: Deloitte estimates that the benefits of advertising to consumers is A$2,100 for the average Australian. 
• Public infrastructure: There is A$352 billion worth of public infrastructure built and maintained by the advertising industry. 

Key quote 

“Advertising promotes competition and innovation by facilitating the transfer of information and by helping businesses reach potential customers,” said John O’Mahony, partner, Deloitte Access Economics, Australia. “Advertising delivers more innovation at lower prices and it’s an important driver of economic growth and important in the fight against inflation.” 

Reported by Duncan W Craig at SXSW Sydney